A Comparative Study of Legal Nature of Buy-Back Contracts and the Related Laws and Regulations

Selecting Buy-Back Contracts as a method of financing projects in oil and gas industry has been, in the one hand, due to the legal limitations and requirements and due to the economic requirements on the other hand. Buy-Back contracts are different in nature from foreign legal institutions such as Counter-Trade and its vorious forms, i.e. production sharing agreements, joint venture contracts, concession contracts. Moreover they are, in the Iranain model, different in nature from domestice legal institutions such as sales and barters.Indeed Buy-Back Contracts have a sui generis nature and are not completely similar to any of foreign and domestic legal institutions. Parties to these contracts intend to make a series of contracts under a single contract with very different conditions from usual contracts. Their basis as every other contract is mutual consent of the parties. This mutual consent must be accepted and respected in so far as it is not against prevailing laws and regalations.